There is many a slip between the cup and the lip

India’s healthcare sector is undergoing a seismic transformation, offering a windfall for investors navigating beyond conventional boundaries. This spans from the bustling corridors of hospitals to the innovation-driven landscapes of startups, creating multiple opportunities. New hospitals, both public and private, are being constructed. Many hospital players are scouting for inorganic opportunities to expand their network, resulting in consolidation. Private equity investments have increased. Hospital companies and diagnostic centers are expanding into Tier-III and Tier-IV cities. Make in India is finding limited success, as expected. The PLI scheme is being fine-tuned, as and when required, propelling the industry toward indigenization. The government seems determined to ensure that its citizens have access to healthcare. The USD 180-billion Indian healthcare market is on a 12-percent CAGR path.

However, this can all change, and very rapidly too. The Supreme Court wants the government to introduce price controls across hospitals in India, ignoring the fact that India is a free market economy and forces of demand and supply must be allowed to come into play. The Center is expected to expeditiously fix treatment charges to be paid by patients. The private hospitals are up in arms. Standardization of rates for different medical procedures and for all categories of patients, will be catastrophic for the industry. Apart from it being an almost impossible task, it will impact investments, and destroy incentives for establishing new hospitals. It could result in the closure of numerous hospitals too.

Dues for procedures conducted under the Center’s PMJAY scheme are being delayed and sometimes declined or bills slashed arbitrarily. Additionally, low cost of treatment packages set by the government is adding to the hospitals’ woes, placing a huge financial stress on the empaneled hospitals, most being small- and medium-sized facilities, with 10- to 25-bed capacity. This has resulted in some of them shutting down services, and others refusing patient admission. Some have withdrawn their names from the scheme, and a few have even approached the courts. There are 29,811 empaneled hospitals, of which 12,631 are private.

Another dark cloud threatening the healthcare services in India is a global deficit of 4.3 million physicians, nurses, and health professionals. This is prompting the Western world to look toward India that is already reeling under acute shortage of medical professionals.

The general inflation rate of India has been surpassed by medical inflation. The world-class amenities, along with skilled medical professionals, available in the country, with an exorbitant price tag are unaffordable by most. The country is heading toward failing in its objective of a more inclusive and sustainable healthcare system that ensures affordable and accessible care for all.

India cannot afford to allow this sector to be derailed!